The company denies misleading investors about some complex securities. Its first-quarter revenue increases 36% to $12.8 billion.

Bolstered by unexpectedly strong earnings, executives at Goldman Sachs Group Inc. took in stride the government's fraud lawsuit against the firm as they downplayed the importance of allegations that the company misled investors about some of the complex securities at the heart of the 2008 financial crisis.

In their first extended comments about the lawsuit, executives told industry analysts and investors in a conference call Tuesday that the company did nothing wrong in the case outlined Friday by the Securities and Exchange Commission.

"We would never intentionally mislead anyone, certainly not our clients," said Greg Palm, Goldman's chief legal counsel. "When you go to the core of the SEC complaint, it clearly revolves around a he-said-she-said a little bit."

David Viniar, the firm's chief financial officer, said matter-of-factly: "As long as we continue to perform for our clients, they will be happy with us. And if we stop performing for them, they won't."

After the call, a wide range of banking analysts gave Goldman's presentation a positive reading, recommending that clients buy the stock.

"I found it very reassuring that they took it in stride, that they seemed so calm," said Michael Wong, an analyst with research firm Morningstar Inc. "It seems like Goldman has mounted a pretty decent defense to the allegation."

For the first quarter, Goldman's profit soared more than 90% to $3.5 billion, or $5.59 a share, compared with $1.8 billion, or $3.39, for the first three months of last year. Wall Street analysts on average had expected net income of $4.14 a share, according to a survey by Bloomberg.

Quarterly revenue increased 36% to $12.8 billion.

As with other big banks this year, most of the revenue came from the trading of fixed-income instruments such as bonds, currencies and commodities. That trading accounted for 57% of the firm's revenue and was boosted by the volatility in the markets and low government interest rates.

"You can see from our results last quarter that our clients still support us," Viniar said.

The New York investment bank emerged from the financial crisis stronger than almost any other firm. But even before the SEC lawsuit was filed, the company was buffeted by public criticism over its huge bonuses and its marketing of complex financial instruments in the years before the credit crunch.

In response to public anger, executives decided at the end of last year to reduce the annual pool of money it set aside for 2009 compensation, leaving it with $16.2 billion, or an average of $498,000 for each employee.

But for the first three months of this year, the compensation pool jumped to $5.5 billion, which amounts to 43% of the company's total revenue. If that figure holds over the entire year, it would be enough to pay each of employee $665,000.

Goldman's stock has been hit heavily since the SEC filed its lawsuit, dropping more than 10%. On Tuesday, shares fell $3.34, or 2%, to $159.98.

Earlier Tuesday, the British Financial Services Authority said it would begin a formal investigation of Goldman's activities there. Prime Minister Gordon Brown last week accused the bank of "moral bankruptcy."

British Liberal Democrat leader Nick Clegg recommended that the company be suspended from its role as a government advisor until the allegations are investigated.

In Berlin, German Chancellor Angela Merkel's government said it was evaluating "legal steps" against Goldman.

The SEC accused Goldman of creating a collateralized debt obligation that was designed to fail and that ultimately led to $1 billion in losses for its customers.

The new class of securities was formed at the request of a major hedge fund client, John Paulson, who wanted to bet against the security, the complaint alleged. The SEC said that Goldman misled investors who bought the securities by not explaining Paulson's role in its creation.

Goldman executives said the SEC had collected material from Goldman Sachs in the months before it brought the case, but Palm said the firm had no warning about the lawsuit.

"We were somewhat surprised on Friday morning that this was a filed case. No one had told us about it in advance," Palm said.

The company has mounted an ever-broadening defense of itself since then. It has emphasized that the investors who bought the securities were sophisticated enough to judge the quality of it. Palm also noted that Goldman bought some of the securities itself, and lost $100 million — a figure that has been revised upward since Friday.

"We obviously thought there was nothing wrong with this portfolio, otherwise we wouldn't have done that," Palm said.

Douglas Sipkin, a bank analyst at Ticonderoga Securities, said potential clients were unlikely to be scared off by the allegations primarily because of how many other banks were doing similar things before the credit crunch.

"I don't think, when institutional investors look at this, that they will think Goldman was doing anything materially different than what other institutions were doing," Sipkin said.

As for possible fines or penalties, analyst Wong of Morningstar said, "No matter how big the fine, Goldman Sachs can likely absorb it."